Even though your MO nonresident state is reporting all income when calculating MO taxes, you should only
be paying MO state income taxes on your MO-source income only.
MO taxes all the
income reported when calculating MO state income taxes (whether resident,
part-year resident or nonresident) but you will only be required to paid a
portion of the total MO state income taxes calculated (your percentage of the
total MO tax that relates to your MO source income only)
The way that the MO
state income tax return works is that MO looks at all of your income from all
sources and generates a total MO state income tax on all income. When MO
is determining the actual MO state income taxes that you owe, MO multiples
the total MO taxes on all income by the percentage of MO source income over all
source income. So if all your income is $10,000 but MO source income is $8,000,
MO will calculate the MO state income tax on $10,000 then multiply this
total tax by your MO source income over total income ($8,000/$10,000) to get
your percentage of MO state income taxes on your MO source income. So in this
instance, your MO state income tax liability would be 80% of the total amount
of MO taxes generated (on all income). That is why all your income is
being reported on your MO state tax return.
You can preview your
MO Tax summary to see what portion of the total taxes for MO you are actually
paying
To preview MO Tax
Summary:
- TurboTax Online sign-in,
click Here
- Under Tax Timeline, click on
Continue your return
- Go to "My Account"
> "Tools"
- Under the Tools Center,
select "view tax summary"
- Select "MO Tax
Summary"
If you are a
permanent resident of IL but have earned income in MO, then you will need to
file a MO nonresident state income tax return (for your MO source income
only - your MO wages). You will also need to file a IL resident state tax
return (for all income from all sources including MO wages). You will get a
state income tax credit in IL for any MO state income taxes that you paid on
your nonresident MO state income tax return.
You will want to work on your nonresident MO state
income tax return first. You will then take a tax credit from your
nonresident MO state income taxes on your resident IL state income tax return.
(Please note that you will only get a tax credit for your MO state income taxes
up to the amount of IL state income taxes that would have been paid if the
income was earned in IL). The credit for taxes paid to another state
section will be at the end of your residence state's interview process.
Just follow the
TurboTax guide when working on your states (remembering to do your nonresident
state return first) and TurboTax will do all the calculations and credits to
your resident states return
Here is additional
information about filing in multiple states (select "see more answer"
to view the entire attachment)
